It really depends on the situation. What appears to be a "serious state of disrepair" to you depending on where you live now and what sort of properties you're used to seeing might not be as bad as your assumption. I've heard people call the neighborhood where I live the "ghetto" because there are some 60 year old beach houses that are clearly in disrepair. But most people would say that Puako Beach (about six miles from Waikoloa Village) is full of luxury beach front houses that sell in the $4-7 million dollar range. It's all about perspective.
Secondly, it depends on the buyer's situation and are they getting a loan? If the buyer is getting a loan it depends on the appraiser. The appraiser might choose to take the house next door into consideration when assigning value to the listing, but they might not. The appraiser's prime directive is to use "comparable" properties that have SOLD recently to determine the market value of a property, not to use a property next door that is not on the market, but in poor condition.
In a market that is clearly turning from a buyer's market to a sellers' market, like Waikoloa Village, the next door house might not come under consideration at all. When there is limited inventory, as we're seeing now, it's likely the listing will get multiple offers and sell at a good price despite the neighbor.
My best piece of advice to you is work with a local REALTOR - and when I say local, I mean hyper-local. Don't work with someone who says they can "sell the whole island" - although our licenses allow us to sell across the whole state, the truth is someone from Hilo cannot possible "know" a local neighborhood like Waikoloa Village (they are 1.5 hours apart driving time, one way) and visa versa. Look for someone who lives and works in Waikoloa Village, they'll have the "inside scoop." And believe me, in Hawaii, you want to know the "inside scoop!" Good luck!!